Joe Malone’s string of failed companies

Congressional candidate’s firms dissolved by state

Credit: AP (File)

LOOKING AHEAD: Former treasurer Joe Malone says small businesses will fuel Massachusetts growth, but has seen several of his own go bankrupt or be dissolved by the state. (File)

Joe Malone has left behind a trail of dissolved and failed businesses - as he campaigns for Congress partly on the platform of reviving the economy through small-business growth.

Three of the past four businesses the former state treasurer has been involved in were either involuntarily dissolved by the state for failure to file required annual reports or - in one spectacular case involving a Waltham steak joint - went belly-up and into bankruptcy after being open for only 16 months.

Coupled with the infamous $9.4 million looting of an unclaimed-property fund overseen by the treasurer’s office when Malone was in office in the 1990s, Democrats are already licking their chops at the possibility of Malone winning the GOP nomination in the 10th Congressional District and then forcing him to defend his business and administrative record over the years.

“Somehow there seems to be the impression that whenever Joe Malone is involved with other people’s money, bad things happen,” said John Walsh, chairman of the Massachusetts Democratic Party.

Malone, now in a tough Republican primary race against Rep. Jeff Perry, said in an interview that he makes no apologies for having tried to start small businesses, even if they didn’t always succeed. He also denied that his firms regularly failed to file annual reports, along with the thousands of dollars in fees associated with the filings.

“Most small-business people will tell you it’s tough and a matter of just getting through the next month,” he said of his business dealings. “I’m proud of my record.”

According to state records, Malone was once president of Nautilus Fitness of Quincy, formed in 1981. Records show the firm submitted only two annual reports and was dissolved in 1990 for failure to file reports in other years.

Malone said the reports weren’t filed in later years for a simple reason: The business was closed due to a real-estate lease change that forced a shutdown. He said his fitness business closed its doors in 1984 or 1986.

Politically active in Republican circles since graduating from college in 1977, Malone was elected state treasurer in 1990 and served two terms.

But his tenure in office is largely remembered for the millions of dollars embezzled from the state’s unclaimed-property fund. Six defendants, including a deputy treasurer and a former Malone fund-raiser and family lawyer, pleaded guilty, though Malone was never implicated.

After Malone left the treasurer’s office in 1999, he briefly ventured into the restaurant business, opening C.P. Nuttings in December 2000, with $30 steaks on the menu. But within 16 months, the Waltham restaurant was closed and the parent company, Waltham Chop House Inc., eventually landed in bankruptcy court.

Hundreds of thousands of dollars were owed to the restaurant’s landlord, the Department of Revenue, beer and wine distributors, linen services, food suppliers, utilities and other creditors, filings show. The bankruptcy case was ultimately settled early last decade. State records do show one thing: Waltham Chop House filed its annual reports in 1999, 2000 and 2001.

Next up was a “business development” consulting firm, M/D Group LLC, formed in 2004 and involuntarily dissolved last year. No state filings were made over its five years of existence, costing the state more than $2,000 in fees, records show. Most annual-report filings come with an annual fee of $100, though limited partnerships have filing fees starting at $450 a year.

Malone said he wasn’t sure why annual reports weren’t filed for the firm. He said M/D Group LLC closed when a partner left to work with Plymouth Rock Studios, the much-touted movie-production development company that’s yet to get off the ground amid questions about its financing and backers. Malone is currently head of Malone & Malone LLC, also a business-development consulting firm, formed in 2004, records show. The firm went three years without filing annual reports, though records show it retroactively submitted past reports in 2008 and is now considered up-to-date in its filings.

Perry, Malone’s Republican opponent in the 10th District race, declined to comment on his rival’s business and administrative record, saying he wants to concentrate on the issues facing district voters.

Malone has been hammering away at Perry, a former police officer, for his alleged mishandling of an investigation 20 years ago of a subordinate officer accused of strip-searching teenage girls. Perry’s business background includes brief stints as a private investigator, convenience-store owner and casket-wholesaler when he lived in Florida. Records show his Massachusetts filings were kept up to date.

Malone, whose campaign Web site says that the economic goose that lays the golden eggs is small business, said at least he started small businesses and knows how difficult it can be for entrepreneurs. “We created jobs and paid taxes,” he said.

Walsh, the state Democratic chairman, said he’s sympathetic to those who start businesses. “Anyone can have a tough go, and that’s true of all small businesses,” he said. “But one (lapse) is a mistake. Two are unfortunate. But after three, you start to see a pattern.”